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January 18, 2021 logo logo
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[Official Guidance]

Text of IRS Rev. Rul. 2021-3: Permitted Disparity in Employer-Provided Contributions or Benefits -- Covered Compensation Tables for the 2021 Plan Year (PDF)

"For purposes of determining covered compensation for the 2021 year, the taxable wage base is $142,800. The following tables provide covered compensation for 2021." Icon to read more

Internal Revenue Service [IRS]

[Guidance Overview]

DOL Issues Fiduciary and Enforcement 'Missing Participant' Guidance

"The guidance includes 'best practices' for retirement plan fiduciaries, compliance assistance to EBSA Regional Offices under the Terminated Vested Participants Project (so-called 'missing participant' audits), and temporary enforcement relief for terminated defined contribution plans and abandoned individual account plans that use the PBGC Missing Participant Program. While this DOL 'missing participant' guidance has been long-awaited, as sub-regulatory guidance, it is all subject to change without notice and comment." Icon to read more

Miller & Chevalier

[Guidance Overview]

Lost and Found: DOL Issues Guidance Relating to Missing Participants

"Sponsors have raised privacy concerns relating to a number of [the listed] strategies. DOL acknowledges these concerns and generally recommends ... asking the relevant parties (e.g., beneficiaries, other related plans) to forward letters to the missing participants.... DOL notes that not all of the listed strategies will be appropriate or necessary for every plan. Also, DOL states that fiduciaries can consider 'the size of a participant's accrued benefit and account balance as well as the cost of search efforts.' ... [It] seems probable that evidence of [a] written policy will be required in DOL investigations and similar settings." Icon to read more

Eversheds Sutherland

[Guidance Overview]

New Year, New COVID-19 Relief for Employers and Retirement Plan Sponsors

"Employers can avoid a 2020 partial plan termination by increasing participant counts by March 31, 2021.... The Qualified Disaster provisions in the CAA are optional.... Plan sponsors of multiemployer plans in the building and constructions industry may allow in-service distributions at or after age 55." Icon to read more

Nelson Mullins

Exceptional Usefulness and Quality icon'Bridges' to Maximize Social Security Benefits Should Be Built Into 401(k)s, Researchers Say

"Retirement researchers recently have been touting the benefits of a so-called bridge strategy, whereby retirees front-load withdrawals from 401(k) plans and individual retirement accounts to delay claiming Social Security. For each year that a person delays claiming up to age 70, his monthly Social Security check goes up 7% to 8%.... This new idea ... calls on 401(k) plan sponsors to introduce a default 'bridge fund' into 401(k) plans that would use fund assets to deliver automatic monthly payments to anyone who retires in their 60s at a level equivalent to the monthly Social Security benefits that seniors would receive at full retirement age." Icon to read more


Benefits in General

Considerations for Recognizing and Addressing Participants with Diminished Capacity (PDF)

42 pages. "[T]he Council recommends that the [DOL] highlight the issue of the risks to individuals resulting from diminished mental capacity, including potential financial exploitation, including: [1] As part of the Department's outreach and education programs, provide general public education ... [2] Publish information ... on the topic, with a focus on ... best practices recommended by the financial services industry ... [3] Issue guidance that recognizes that fiduciaries may voluntarily adopt policies or procedures that: (a) impose reasonable temporary restrictions on participant plan actions ... when participants exhibit signs of diminished capacity or financial exploitation, and/or (b) encourage actions by participants such as the identification of a 'trusted contact,' require confirmation of a Power of Attorney authorization's continuing effectiveness, or take other reasonable steps ... to protect participants from potential fraud and financial abuse." Icon to read more

Advisory Council on Employee Welfare and Pension Benefit Plans, Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]

Executive Compensation
and Nonqualified Plans

[Guidance Overview]

IRS Releases Final Regs for Excess Compensation Paid by Exempt Organizations

"The substantive changes contained in the final regulations generally are limited to expanding the nonexempt funds exception to the definition of covered employees. In addition, the final regulations add a number of examples to clarify provisions originally included in the proposed regulations." Icon to read more


[Guidance Overview]

IRS Issues Final Regs Under Code Section 4960

"[To] provide more flexibility in cases where an employee may unexpectedly fail to meet the 50% threshold in an applicable year, [the final regulations] expand the measurement period for the non-exempt funds exception from one applicable year to two applicable years ... The final regulations adopt the definition of ATEO set forth in the proposed regulations." Icon to read more

Thomson Reuters Practical Law

Examining Top Hat Plan Participation and Reporting (PDF)

64 pages. "[T]he Council recommends that the Department: [1] Require that top hat plan sponsors notify eligible participants of the risks associated with the absence of ERISA's substantive protections ... [2] Revise the alternative reporting regime for top hat plans to: Require reporting every 3 years or, if earlier, upon ceasing to cover any employees; [and] Include, at a minimum, [specified] data elements ... [3] Issue a Request for Information seeking comments from interested stakeholders on possible regulatory definitions of a 'select group of management or highly compensated employees,' including possible bright-line definitions and/or safe harbor/unsafe harbor definitions." Icon to read more

Advisory Council on Employee Welfare and Pension Benefit Plans, Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]

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Safe Harbor QACA Match

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200% on first 1% and 50% on next 5%." Icon to read more

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Press Releases

NCEO Captive Insurance Program Will Launch This Summer
National Center for Employee Ownership [NCEO]

Most Popular Items in the Previous Issue

View COVID-19 News and Resources, Inc.
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Lois Baker, J.D., President
David Rhett Baker, J.D., Editor and Publisher
Holly Horton, Business Manager

BenefitsLink Retirement Plans Newsletter, ISSN no. 1536-9587. Copyright 2021, Inc. All materials contained in this newsletter are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of, Inc., or in the case of third party materials, the owner of those materials. You may not alter or remove any trademark, copyright or other notices from copies of the content.

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